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Verisk Analytics Inc (NAS:VRSK)
Beneish M-Score
-2.26 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Verisk Analytics Inc has a M-score of -2.26 suggests that the company is not a manipulator.

VRSK' s Beneish M-Score Range Over the Past 10 Years
Min: -2.93   Max: -2.1
Current: -2.26

-2.93
-2.1

During the past 8 years, the highest Beneish M-Score of Verisk Analytics Inc was -2.10. The lowest was -2.93. And the median was -2.64.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Verisk Analytics Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.2139+0.528 * 0.9817+0.404 * 1.2993+0.892 * 1.1612+0.115 * 1.0403
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0795+4.679 * -0.0431-0.327 * 1.0762
=-2.26

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $266 Mil.
Revenue was 550.401 + 497.65 + 459.397 + 464.864 = $1,972 Mil.
Gross Profit was 340.234 + 302.454 + 275.181 + 271.282 = $1,189 Mil.
Total Current Assets was $618 Mil.
Total Assets was $5,619 Mil.
Property, Plant and Equipment(Net PPE) was $392 Mil.
Depreciation, Depletion and Amortization(DDA) was $185 Mil.
Selling, General & Admin. Expense(SGA) was $286 Mil.
Total Current Liabilities was $1,541 Mil.
Long-Term Debt was $2,293 Mil.
Net Income was 131.814 + 163.32 + 98.686 + 97.37 = $491 Mil.
Non Operating Income was 17.912 + 84.966 + -0.538 + 0.076 = $102 Mil.
Cash Flow from Operations was 164.543 + 84.511 + 270.99 + 110.817 = $631 Mil.
Accounts Receivable was $189 Mil.
Revenue was 448.665 + 423.554 + 409.643 + 416.723 = $1,699 Mil.
Gross Profit was 267.792 + 251.084 + 239.97 + 246.567 = $1,005 Mil.
Total Current Assets was $706 Mil.
Total Assets was $2,678 Mil.
Property, Plant and Equipment(Net PPE) was $281 Mil.
Depreciation, Depletion and Amortization(DDA) was $141 Mil.
Selling, General & Admin. Expense(SGA) was $228 Mil.
Total Current Liabilities was $561 Mil.
Long-Term Debt was $1,136 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(266 / 1972.312) / (188.711 / 1698.585)
=0.1348671 / 0.11109894
=1.2139

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(302.454 / 1698.585) / (340.234 / 1972.312)
=0.59191209 / 0.60292236
=0.9817

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (617.762 + 391.625) / 5619.097) / (1 - (705.652 + 281.347) / 2677.7)
=0.82036491 / 0.63140046
=1.2993

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1972.312 / 1698.585
=1.1612

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(141.234 / (141.234 + 281.347)) / (185.369 / (185.369 + 391.625))
=0.33421758 / 0.32126677
=1.0403

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(285.842 / 1972.312) / (228.051 / 1698.585)
=0.14492737 / 0.1342594
=1.0795

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2292.892 + 1540.758) / 5619.097) / ((1136.205 + 561.34) / 2677.7)
=0.68225375 / 0.63395638
=1.0762

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(491.19 - 102.416 - 630.861) / 5619.097
=-0.0431

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Verisk Analytics Inc has a M-score of -2.26 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Verisk Analytics Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92691.27680.97181.1730.7841.2715
GMI 1.08690.87990.98930.94671.03791.0341
AQI 0.93871.06010.86561.22460.93240.986
SGI 1.14951.10831.171.05711.13341.0946
DEPI 0.99091.05271.06230.98411.1031.1363
SGAI 1.07790.92321.07610.99390.9180.9069
LVGI 0.80741.1111.020.83370.86671.1742
TATA -0.1981-0.0769-0.0608-0.0588-0.0633-0.0381
M-score -3.27-2.54-2.71-2.43-2.79-2.34

Verisk Analytics Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.04220.95710.7840.80220.83540.97231.27151.18461.33471.2139
GMI 0.9530.95211.03791.05281.0611.07741.03411.01481.00120.9817
AQI 1.01130.92270.93240.90670.87970.8770.9861.05791.30391.2993
SGI 1.0310.99871.13341.13251.1421.15691.09461.1031.12561.1612
DEPI 0.96351.05131.1031.16341.19651.11451.13631.08231.10211.0403
SGAI 0.95840.94960.9180.91230.91790.91170.90690.90141.02061.0795
LVGI 0.84430.83140.86670.88840.85880.89161.17421.11241.06321.0762
TATA -0.0741-0.0717-0.0633-0.0626-0.0598-0.0408-0.0381-0.0598-0.0318-0.0431
M-score -2.73-2.84-2.79-2.78-2.72-2.50-2.34-2.48-2.10-2.26
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